Product, Services, and Branding Strategy

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Product, Services, and Branding Strategy

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Product, Services, and Branding Strategy

  1. 1. Product, Services, and Branding Strategy Chapter 8
  2. 2. Learning Goals <ul><li>Understand products and the major classifications of products and services </li></ul><ul><li>Learn the decisions companies make regarding their products and services </li></ul><ul><li>Understand branding strategy </li></ul><ul><li>Identify the four characteristics that affect the marketing of a service </li></ul><ul><li>Realize additional product issues </li></ul>
  3. 3. <ul><li>Produce 7.5 million doughnuts each day </li></ul><ul><li>Sell more than doughnuts; they sell an experience </li></ul><ul><li>New store openings are eagerly anticipated in part due to extensive promotion </li></ul>Case Study Krispy Kreme
  4. 4. Definitions <ul><li>Product </li></ul><ul><ul><li>Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. </li></ul></ul><ul><li>Service </li></ul><ul><ul><li>A form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. </li></ul></ul>Goal 1: Understand products and their classifications
  5. 5. What is a Product? <ul><li>Products, Services, and Experiences </li></ul><ul><ul><li>Market offerings may consist of a combination of goods and services </li></ul></ul><ul><ul><li>Experiences are used to differentiate offerings </li></ul></ul><ul><li>Levels of Product and Services </li></ul><ul><ul><li>Core benefit, actual and augmented product </li></ul></ul><ul><li>Product and Service Classifications </li></ul><ul><ul><li>Consumer products and industrial products </li></ul></ul>Goal 1: Understand products and their classifications
  6. 6. What is a Product? <ul><li>Convenience </li></ul><ul><li>Shopping </li></ul><ul><li>Specialty </li></ul><ul><li>Unsought </li></ul><ul><li>Frequent purchases bought with minimal buying effort and little comparison shopping </li></ul><ul><li>Low price </li></ul><ul><li>Widespread distribution </li></ul><ul><li>Mass promotion by producer </li></ul>Types of Consumer Products Goal 1: Understand products and their classifications
  7. 7. What is a Product? <ul><li>Convenience </li></ul><ul><li>Shopping </li></ul><ul><li>Specialty </li></ul><ul><li>Unsought </li></ul><ul><li>Less frequent purchases </li></ul><ul><li>More shopping effort for comparisons. </li></ul><ul><li>Higher than convenience good pricing </li></ul><ul><li>Selective distribution in fewer outlets </li></ul><ul><li>Advertising and personal selling </li></ul>Types of Consumer Products Goal 1: Understand products and their classifications
  8. 8. What is a Product? <ul><li>Convenience </li></ul><ul><li>Shopping </li></ul><ul><li>Specialty </li></ul><ul><li>Unsought </li></ul><ul><li>Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity </li></ul><ul><li>High price </li></ul><ul><li>Exclusive distribution </li></ul><ul><li>Carefully targeted promotions </li></ul>Types of Consumer Products Goal 1: Understand products and their classifications
  9. 9. What is a Product? <ul><li>Convenience </li></ul><ul><li>Shopping </li></ul><ul><li>Specialty </li></ul><ul><li>Unsought </li></ul><ul><li>Little product awareness and knowledge (or if aware, sometimes negative interest) </li></ul><ul><li>Pricing varies </li></ul><ul><li>Distribution varies </li></ul><ul><li>Aggressive advertising and personal selling by producers and resellers </li></ul>Types of Consumer Products Goal 1: Understand products and their classifications
  10. 10. Product and Service Classifications <ul><li>Consumer products </li></ul><ul><li>Industrial products </li></ul><ul><ul><li>Materials and parts </li></ul></ul><ul><ul><li>Capital items </li></ul></ul><ul><ul><li>Supplies and services </li></ul></ul>Goal 1: Understand products and their classifications
  11. 11. Product and Service Classifications <ul><li>Organizations, persons, places, and ideas </li></ul><ul><ul><li>Organizational marketing makes use of corporate image advertising </li></ul></ul><ul><ul><li>Person marketing applies to political candidates, entertainment sports figures, and professionals </li></ul></ul><ul><ul><li>Place marketing relates to tourism </li></ul></ul><ul><ul><li>Social marketing promotes ideas </li></ul></ul>Goal 1: Understand products and their classifications
  12. 12. Product and Service Decisions <ul><li>Individual Product </li></ul><ul><li>Product Line </li></ul><ul><li>Product Mix </li></ul><ul><li>Product attributes </li></ul><ul><ul><li>Quality, features, style and design </li></ul></ul><ul><li>Branding </li></ul><ul><li>Packaging </li></ul><ul><li>Labeling </li></ul><ul><li>Product support services </li></ul>Key Decisions Goal 2: Learn decisions companies make regarding products
  13. 13. Product and Service Decisions <ul><li>Product line </li></ul><ul><ul><li>A group of products that are closely related because they may: </li></ul></ul><ul><ul><ul><li>function in a similar manner </li></ul></ul></ul><ul><ul><ul><li>be sold to the same customer groups, </li></ul></ul></ul><ul><ul><ul><li>be marketed through the same types of outlets </li></ul></ul></ul><ul><ul><ul><li>fall within given price ranges </li></ul></ul></ul><ul><li>Individual Product </li></ul><ul><li>Product Line </li></ul><ul><li>Product Mix </li></ul>Key Decisions Goal 2: Learn decisions companies make regarding products
  14. 14. Product and Service Decisions <ul><li>Individual Product </li></ul><ul><li>Product Line </li></ul><ul><li>Product Mix </li></ul><ul><li>Product line length </li></ul><ul><ul><li>Line stretching: adding products that are higher or lower priced than the existing line </li></ul></ul><ul><ul><li>Line filling: adding more items within the present price range </li></ul></ul>Key Decisions Goal 2: Learn decisions companies make regarding products
  15. 15. Product and Service Decisions <ul><li>Individual Product </li></ul><ul><li>Product Line </li></ul><ul><li>Product Mix </li></ul><ul><li>Product mix </li></ul><ul><ul><li>Also known as product assortment </li></ul></ul><ul><ul><li>Consists of all the product lines and items that a particular seller offers for sale </li></ul></ul>Key Decisions Goal 2: Learn decisions companies make regarding products
  16. 16. Product and Service Decisions <ul><li>Individual Product </li></ul><ul><li>Product Line </li></ul><ul><li>Product Mix </li></ul><ul><li>Product mix width: </li></ul><ul><ul><li>Number of different product lines carried by company </li></ul></ul><ul><li>Product mix depth: </li></ul><ul><ul><li>Number of different versions of each product in the line </li></ul></ul><ul><li>Product mix consistency </li></ul>Key Decisions Goal 2: Learn decisions companies make regarding products
  17. 17. Branding Strategy <ul><li>Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service </li></ul><ul><li>One measure of equity is the extent to which customers are willing to pay more for the brand </li></ul><ul><li>Brand valuation is the process of estimating the total financial value of a brand </li></ul>Goal 3: Understand branding strategy
  18. 18. Branding Strategy <ul><li>Brands with strong equity have many competitive advantages: </li></ul><ul><ul><li>High consumer awareness </li></ul></ul><ul><ul><li>Strong brand loyalty </li></ul></ul><ul><ul><li>Helps when introducing new products </li></ul></ul><ul><ul><li>Less susceptible to price competition </li></ul></ul>Goal 3: Understand branding strategy
  19. 19. Brand Strategy <ul><li>Brand Positioning </li></ul><ul><li>Brand Name Selection </li></ul><ul><li>Brand Sponsorship </li></ul><ul><li>Brand Development </li></ul><ul><li>Three levels of positioning: </li></ul><ul><ul><li>Product attributes </li></ul></ul><ul><ul><ul><li>Least effective </li></ul></ul></ul><ul><ul><li>Benefits </li></ul></ul><ul><ul><li>Beliefs and values </li></ul></ul><ul><ul><ul><li>Taps into emotions </li></ul></ul></ul>Key Decisions Goal 3: Understand branding strategy
  20. 20. Brand Strategy <ul><li>Brand Positioning </li></ul><ul><li>Brand Name Selection </li></ul><ul><li>Brand Sponsorship </li></ul><ul><li>Brand Development </li></ul><ul><li>Good Brand Names: </li></ul><ul><ul><li>Suggest something about the product or its benefits </li></ul></ul><ul><ul><li>Are easy to say, recognize and remember </li></ul></ul><ul><ul><li>Are distinctive </li></ul></ul><ul><ul><li>Are extendable </li></ul></ul><ul><ul><li>Translate well into other languages </li></ul></ul><ul><ul><li>Can be registered and legally protected </li></ul></ul>Key Decisions Goal 3: Understand branding strategy
  21. 21. Brand Strategy <ul><li>Brand Positioning </li></ul><ul><li>Brand Name Selection </li></ul><ul><li>Brand Sponsorship </li></ul><ul><li>Brand Development </li></ul><ul><li>Manufacturer brands </li></ul><ul><li>Private (store) brands </li></ul><ul><ul><li>Costly to establish and promote </li></ul></ul><ul><ul><li>Higher profit margins </li></ul></ul><ul><li>Licensed brands </li></ul><ul><ul><li>Name and character licensing has grown </li></ul></ul><ul><li>Co-branding </li></ul><ul><ul><li>Advantages / disadvantages </li></ul></ul>Key Decisions Goal 3: Understand branding strategy
  22. 22. Brand Strategy <ul><li>Brand Positioning </li></ul><ul><li>Brand Name Selection </li></ul><ul><li>Brand Sponsorship </li></ul><ul><li>Brand Development </li></ul><ul><li>Line extensions </li></ul><ul><ul><li>Minor changes to existing products </li></ul></ul><ul><li>Brand extensions </li></ul><ul><ul><li>Successful brand names help introduce new products </li></ul></ul><ul><li>Multibrands </li></ul><ul><ul><li>Multiple product entries in a product category </li></ul></ul><ul><li>New brands </li></ul><ul><ul><li>New product category </li></ul></ul>Key Decisions Goal 3: Understand branding strategy
  23. 23. Managing Brands <ul><li>Brands are known through advertising, personal experience, word of mouth, the Internet </li></ul><ul><li>Everyone in the company represents the brand </li></ul><ul><li>Companies need to periodically run a brand audit </li></ul>Goal 3: Understand branding strategy
  24. 24. Services Marketing <ul><li>Services </li></ul><ul><ul><li>Account for 74% of U.S. gross domestic product. </li></ul></ul><ul><ul><li>Service industries include business organizations, government, and private not-for-profit organizations. </li></ul></ul>Goal 3: Understand branding strategy
  25. 25. Characteristics of Services <ul><li>Intangibility </li></ul><ul><ul><li>Consumers look for service quality signals </li></ul></ul><ul><li>Inseparability </li></ul><ul><ul><li>Services can’t be separated from providers </li></ul></ul><ul><li>Variability </li></ul><ul><ul><li>Employees and other factors result in variability </li></ul></ul><ul><li>Perishability </li></ul><ul><ul><li>Services can’t be inventoried for later sale </li></ul></ul>Goal 3: Understand branding strategy
  26. 26. Service Firm Marketing Strategies <ul><li>The Service-Profit Chain </li></ul><ul><ul><li>Internal Marketing </li></ul></ul><ul><ul><li>Interactive Marketing </li></ul></ul><ul><li>Managing Service Differentiation </li></ul><ul><li>Managing Service Quality </li></ul><ul><li>Managing Service Productivity </li></ul>Goal 4: Identify 4 characteristics that affect marketing a service
  27. 27. Product Decisions and Social Responsibility <ul><li>Acquiring and dropping products </li></ul><ul><li>Patent protection </li></ul><ul><li>Product quality and safety </li></ul><ul><li>Product warranties </li></ul>Goal 5: Realize additional product issues
  28. 28. International Product and Services Marketing <ul><li>Special challenges: </li></ul><ul><ul><li>Which products should be marketed internationally? </li></ul></ul><ul><ul><li>Should the products be standardized or adapted for world markets? Packaging? </li></ul></ul>Goal 5: Realize additional product issues

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